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Insider selling in Northern Star — a bad sign or an investing strategy?

It was reported that Beament has sold about $22 million worth of shares in Northern Star Resources. According to a Change of Director’s Interest Notice issued to the Australian Securities Exchange (ASX) on the 20th of March 2019, Beament retains 6,283,588 million shares, which is worth approximately $56 million, and 3 million performance rights, after a sale of 2,460,000 shares as a result of a family court settlement. .

In over 15 months, this would have to be the third major sale of shares by Beament. On December 31, the same day Tribune Resources and Rand Mining declined Northern Star’s mining bid for their 49% stake in the East Kundana joint venture, Beamant sold 1 million shares worth around $9.1 million.

More selling of shares than buying from insiders

Over the last year, we saw more selling of Northern Star shares from insiders, than buying. The shares were sold for an average price of about $8.58.

Click on the graph to see details of the recent insider transactions:

Northern Star Insider Trading January 2019

How many shares are held by Northern Star’s insiders? It would be a good sign if insiders are owners of a significant number of shares in the company because it means that the company is operating in the interest of all shareholders. The more insider owners there are, the more chances that insiders will be motivated to build the company for a longer time.

In Northern Star, insiders own 2.7% of the company, which is about AU$166m worth of shares. Is this enough to say that the shares are equally split to the shareholders? It appears that Northern Star’s executive chairman, Bill Beament holds most of the shares and has made the biggest insider sale in 2018. Why did he sell his holdings? Is it to prepare for the acquisition of the Pogo gold mine in Alaska or is it for other unknown expenses?


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